.Sergio Ermotti, ceo of UBS GroupStefan Wermuth|Bloomberg|Getty ImagesZURICH, Switzerland Double A u00b7 UBS CEO Sergio Ermotti mentioned Wednesday that market dryness might escalate in the second fifty percent of the year, but he performs not strongly believe the united state is moving right into a recession.Global equities observed sharp sell-offs last week as financiers digested unstable financial records out of the U.S. which brought up worries concerning a financial downturn in the world's biggest economic climate. It also raised questions regarding whether the Federal Book needed to have to become a lot less hawkish along with its own monetary policy viewpoint. The central bank kept fees on grip in overdue July at a 23-year high.When inquired about the outlook for the USA economy, Ermotti claimed: "Certainly not automatically a recession, yet definitely a stagnation is possible."" The macroeconomic signs are actually unclear adequate to speak about recessions, and also in fact, it's most likely premature. What we know is actually that the Fed has sufficient capacity to intervene and assistance that, although it's mosting likely to take some time, whatever they perform to become then transferred into the economic climate," the CEO informed CNBC on Wednesday after the bank disclosed its own second-quarter results.UBS expects that the Federal Book will reduce rates by at least fifty manner aspects this year. Right now, traders are split between a 50 as well as a 25 basis aspect cut at the Fed's following meeting in September, according to LSEG data.Speaking to CNBC, Ermotti claimed that our company are probably to find greater market dryness in the second half of the year, somewhat as a result of the united state political election in November." That's one element, but likewise, if I take a look at the overall geopolitical photo, if I look at the macroeconomic photo, what our company viewed in the final number of weeks in regards to volatility, which, in my point of view, is a very clear indication of the delicacy of some factors of the system, u00e2 $ u00a6 one should count on certainly a higher degree of volatility," he said.Another unpredictability moving forward is actually monetary plan and also whether reserve banks will certainly have to cut fees extra aggressively to cope with a decline in the economic condition. In Switzerland, where UBS is actually headquartered, the reserve bank has actually reduced fees two times this year. The European Reserve Bank and also the Bank of England possess each declared one cut thus far." Understanding the activities which are theu00c2 unknowns at hand like the U.S. presidential election, our company became contented along with a quite reduced volatility, currently we are actually switching to an even more usual program," Bruno Verstraete, creator of Lakefield Riches Monitoring informed CNBC Wednesday." In the situation of UBS, [additional volatility is] certainly not automatically a bad point, because additional dryness indicates additional investing earnings," he included.